What is business plan:
A business plan is document that provides detailed information covering almost all the aspects of a business. These aspects include details about the company and management, details about the market and industry, details about finances and marketing strategy etc.
A business plan does not need to have any specific rigid structure or format. The structure of a business plan can be modified as per the vision, goals and type of a business.
On an average, a business plan should have 15-20 pages explaining everything in detail. But the size of a business can also changes as per the nature of the business or a startup.
Why you need a business plan:
Every new business or a startup needs to have a clearly defined and detailed business plan before establishing it on a large scale. Some key benefits of having a business plan are:
- It helps the businesses clearly define their goals and understand their strategy
- A well drafted business plan helps the businesses to follow along their strategy and monitor their growth.
- A good business plan can help your startup get the funding it requires.
- It helps businesses to layout their long-term vision and goals.
How to write a business plan:
Writing a business plan can seem daunting at first but by the time you finish reading this article, you will get a clear idea of how you can approach writing your business plan.
There are about five major sections of a business plan. These sections include Introduction, Market Research, Planning and Execution, Finances and finally an Appendix.
Introduction:
This is the first section of business plan which includes all the major details about the business.
For more clear and comprehensive reading , it can also be divided into three sections: 1. Executive Summary, 2. Company Description, and the 3. Products.
Executive Summary:
Executive summary is a brief summary of the complete business plan. It develops the interest in the readers to continue to read for more details in the following sections. It gives a brief introduction and summary of each section highlighting their main points.
For example: What this business is about, what problem is it solving, how it is solving that problem, and the main points about the business strategy etc.
Company Description:
This section of the business plan explains everything in detail about the company. What is the vision of the company, what is it attempting to solve, how is it going to solve it and so on.
Products and services:
This section of a business plan provides detailed information about the products and services that are being provided by the business. Inforamtion is given on the topics like types of products or services, materials of the products, from where you get those materials from, how many types of products or service you offer etc.
Market Research
Now the second part of the business plan, after introduction, is Market Research. In this section you will have to provide detailed explanation of the market research that you have done. It can be further divided into two more sections. 1. Market Analysis, and 2. Competition.
Market Analysis
In this section you will write about the description of your target customers, where are they located, how are they going to come in contact with your business.
This section also provides detailed information regarding your industry and market trends. What is the trends in your industry and how is the market operating.
Competition
Under this headline you are required to give the detailed information you have gathered about the competitors of the business. What defines your competitors, what is their pricing and business strategy, how many competitors are there, how you are going to compete with them and what is your strategy to find your share in the market.
Planning and Execution
The next part in a business plan is about giving detailed information about how you are going to meet your business goals and run your business. It is the description of your strategy and design which you will use to run the operations.
It can also be divided into two sections for improving the readability of your business plan: 1. About Sales and Marketing, and 2. About Management.
Sales and Marketing Plan
This section of the planning and execution part deals with providing information about about how your business is going to make sales. What is your marketing strategy and how you think that will increase your sales.
Management Team
This section gives detailed information about the management team. Information about how many team members are there in a team, how many teams are there, what are the qualifications of each team member, how are they going to make this business a success and further questions like that.
Finances
This section of a business plan is one of the most important sections as it deals with providing information about all round financial picture of the business. Relevant questions like how much capital business have at the moment, how was that capital raised, how much more money would be required, how are you planning to raise that money, and how much revenue are you expecting to generate from this, should be answered in detail.
This way an investor can make better decision about investing in your business or startup.
Appendix
This is the final section of a business plan where you can put any information that might help solidify the information you provided in other sections. Things such as your credentials, team member credentials, any references you might have, any reports you have, some kind of approval you may have, any trademarks or legal documents regarding your business etc.
Conclusion:
So this was a quick guide to help you understand the meaning of a business plan, why is it important, and how you can write one for your own business or startup. The format and writing of business plan can be different for different businesses but the essence of it remains the same. For example, every business plan should have most of the categories that have been explained above like introduction and strategies.
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